Airbnb and The Future of Rental Property

treehouseThere I was sitting in a closing last month representing a seller, and the buyer kept talking about his Airbnb rental empire. Intrigued I asked lots of questions about what it looked like, how he chose the properties he purchased, and what revenue he generated. Luckily he was willing to share, and wow was I impressed. He was setting this three bedroom unit up with a poker table and marketing it as more or less a guy’s getaway pad.

Within one condo building downtown, the Landmark which is located across from the capital, it’s almost 50% owned by Airbnb owners. At $150 per night, you’re talking about at least $3,000 per month in revenue if it’s booked for 20 days out of the month. Compare that to a typical $1200-1500 in monthly rental income and you have a viable cash cow!

Much like the old hostels providing one bedroom crash pads for travelers, Airbnb has capitalized on a growing market of consumers who want something convenient, easy, and unique. According to Airbnb, the most popular unit in the world is a treehouse right here in Buckhead. Renting for $350 per night, it’s easy to see how this treehouse rolls in the dough for owners Katie and Peter.

So what do you look for in a potential Airbnb property? Here’s a breakdown of the top things I’d consider:

  1. Location – if you are going to be an Airbnb host, you’ll want a desirable location. Why would someone come to your property? This is really no different than any real estate you may purchase.
  2. Size matters – while I’m sure there’s a market for renting that one bed in your condo to a fragile guest, the best rule of thumb is to purchase larger properties that provide privacy for the guests. This will ensure you maximize your profit as well.
  3. Minimize the HOA’s – amenities are nice, but they can hurt your profitability, especially if the amenities are outdated and undesirable. HOA’s are also going to be more likely to restrict your ability to rent or operate an airbnb business due to potential rental restrictions.
  4. Comparables – check the current inventory of available properties in the area you are looking to purchase in. You never want to be the highest priced unit in an area. Go for the sweet spot of pricing to ensure you win the most business.

When you’re ready to start your Airbnb or rental empire, call The Peters Company at 404.419.3619. We will help you cash flow your way to a great future!

Written by Andy Peters


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